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The Simple Solution to Climate Change: Tax Carbon Emissions

President Obama recently unveiled his 21-page framework for tackling climate change. But for some economists, that's twenty pages too many. A tax on carbon emissions is a simple, elegant, and relatively painless way to reduce emissions, they believe.

"Climate change seems like this complicated problem with a million pieces," says David Kestenbaum. "But Henry Jacoby, an economist at MIT's business school, says there's really just one thing you need to do to solve the problem: Tax carbon emissions."

"'If you let the economists write the legislation,' Jacoby says, 'it could be quite simple.' He says he could fit the whole bill on one page."

"Basically, Jacoby would tax fossil fuels in proportion to the amount of carbon they release," explains Kestenbaum. "That would make coal, oil and natural gas more expensive. That's it; that's the whole plan."

"This is why economists love a carbon tax: One change to the tax code and the entire economy shifts to reduce carbon emissions. No complicated regulations. No rules for what kind of gas mileage cars have to get or what specific fraction of electricity has to come from wind or solar or renewables. That's by and large the way we do it now."